## Facts

- A limited partnership and related entities formed to produce a Broadway musical and retained (1) a fundraiser to secure investors and (2) Marc Thibodeau as the show’s press/publicity agent.
- The fundraiser fabricated a purported major investor and related participants; the investor did not exist.
- The producer was separately negotiating with an “angel” investor, Laurence Runsdorf, who required confidentiality as to his identity and involvement.
- Thibodeau learned the fundraiser’s purported investor was fictitious and reported this to the producer’s principal, who told him to remain quiet.
- Thibodeau then sent four anonymous emails to Runsdorf (including one under a false name) containing negative assertions about the producer and the project and urging Runsdorf not to invest.
- Runsdorf promptly withdrew after receiving the final email, and the production did not go forward.

## Issues

1. Whether the producer was entitled to summary judgment for breach of contract based on the implied covenant of good faith and fair dealing where the press agent used confidential information to anonymously discourage a key investor, despite no express contractual term addressing such conduct.
2. Whether the press agent was entitled to summary judgment dismissing defamation claims on the ground that the anonymous emails contained only nonactionable opinion rather than defamatory statements of fact.
3. Whether the press agent was entitled to summary judgment dismissing tortious interference with prospective business relations where his conduct allegedly used confidential information and false statements to cause a prospective investor to withdraw.

## Decision

- The appellate court affirmed.
- The producer was entitled to summary judgment on liability for breach of contract against Thibodeau.
- The defamation claim against Thibodeau presented triable issues and was properly left for trial.
- The tortious interference with prospective business relations claim presented triable issues and was properly left for trial.

## Legal Principles

- Under New York law, the implied covenant of good faith and fair dealing is breached when a party acts to destroy or injure the other party’s right to receive the benefits of the contract, even absent violation of an express term.
- A contract counterparty’s use of confidential information obtained through the contractual relationship, for a purpose adverse to the other party’s contractual interests, can constitute breach of the implied covenant.
- Defamation claims may proceed where statements in context can reasonably be understood as asserting verifiable facts (or implying undisclosed facts) and are alleged to be false; labeling assertions as “opinion” is not dispositive.
- Tortious interference with prospective business relations requires a prospective business relationship, the defendant’s knowledge, intentional interference by wrongful means (or sufficiently culpable conduct), and resulting injury; misuse of confidential information, anonymity/false identity, and alleged false factual assertions aimed at stopping a deal can satisfy the “wrongful means” requirement for trial purposes.

## Conclusion

The court held that the press agent’s anonymous communications to a confidential prospective investor, using information learned through his role and allegedly aimed at stopping the investment, breached the implied covenant as a matter of law and also raised fact issues requiring trial on defamation and tortious interference with prospective business relations.


Rebecca Broadway Ltd. P'ship v. Hotton, 143 A.D.3d 71 (1st Dep’t 2016)